An FCC Commissioner calls for the agency to get serious about an audit of …

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Federal Communications Commissioner Jonathan Adelstein has asked that the agency look into the Arbitron Portable People Meter (PPM), the media metrics company's controversial new automated system for assessing the size of radio audiences.

"Today, I am requesting that we immediately open a formal investigation to determine whether the PPM ratings methodology undermines the goals of Congress and the Commission to enhance media diversity and expand opportunities for minority-owned businesses to own viable broadcasting outlets," Adelstein wrote to FCC Chair Kevin Martin on Tuesday. The Commission has just finished a public proceeding on whether to launch a probe of the device, which critics charge will reduce ratings for minority radio stations.

Adelstein's request may even have the backing of the next president of the United States. This is one of the few FCC related matters that President Elect Barack Obama has weighed in on during the last few months. On September 28, he and Senator Richard Durbin (D-IL) sent a letter to Arbitron asking them to delay rolling out the PPM. "As you know, failures in accuracy unrelated to the technology are not only possible, but likely, without careful execution and proper selection of participants," they warned.

Beyond the diary

As Ars Technica has reported, a host of minority broadcasting groups charge that the PPM system will undercount minority radio station audiences. The PPM is a mobile phone-sized device that a participant agrees to wear through the day; it replaces Arbitron's hallowed "diary" system, in which consumers keep written track of their listening habits.

The application picks up inaudible ID codes in radio signals streaming near the person who wears the receiver, then transmits the intel via the household telephone line to Arbitron, which incorporates it into the firm's database of listening habits. Advertisers use Arbitron listening statistics to decide which stations to place ads on. Arbitron stats have a big impact on the advertising revenue of radio stations, which are in sharp decline these days.

Civil rights groups and minority broadcasters say that the PPM's sampling of minority audiences will be smaller than old school diary samples, that the new system's recruiting methods sometimes ignore cell phone only (CPO) houses, and that women and young minority listeners are often reluctant to wear the conspicuous device, which looks like a pager. They also argue that the diary system allows participants to emphasize loyalty to certain radio stations, which the new system does not.

"Arbitron’s flawed PPM methodology would likely wipe out half of the nation’s minority broadcasters by failing to capture minority radio listeners' unparalleled loyalty to stations serving their needs," argued a recent filing by the Hispanic Technology and Telecommunications Partnership and three other groups, "a key factor in diary measurements for which panelists emphasize stations they recall and enjoy, and de-emphasize stations for which their listening and attention is only ephemeral or fleeting."

Most significantly, advocates of an investigation note that the organization that sets standards for Arbitron's systems, the Media Ratings Council, has decided not to approve the firm's methodology in New York City and Philadelphia. Despite this, Arbitron announced plans to go ahead with PPM in various markets in September, including Chicago, San Francisco, San Jose, and Riverside-San Bernadino, California.

PPM pushback

Arbitron's response is that radio stations targeting black and Hispanic audiences are "holding their own," under PPM, that various minority stations in Houston, Texas (where the device has been accredited) are doing well, that CPOs are included in recruitment, and that, overall, the device tracks actual listening patterns more honestly than the diary system.

"PPM is recording exactly what it was developed to measure—listener exposure, not listener recall or loyalty," Arbitron told the FCC in late October. The company acknowledges that it is still "pursuing accreditation" in New York and Philadelphia, but insists that "there is no requirement that accreditation must precede commercialization."

Arbitron also says that the FCC lacks authority to review the PPM, contending that "Congress and the Commission have expressly stated that the investigation and auditing of audience ratings services are best left to private industry groups."

But Adelstein's letter insists that Section 403 of the Communications Act empowers the FCC to investigate any matter regarding a provision of the law. And Section 257, he continues, "unquestionably authorizes the Commission to eliminate market entry barriers for minorities to own broadcast stations" and to "identify ways to promote minority ownership."

Seems like a fair bet that, if Kevin Martin's FCC doesn't take up this issue, the one set up by the next President probably will.

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Matthew Lasar
Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz. Emailmatthew.lasar@arstechnica.com//Twitter@matthewlasar